Correlation Between Israel Discount and Mivne Real
Can any of the company-specific risk be diversified away by investing in both Israel Discount and Mivne Real at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Israel Discount and Mivne Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Israel Discount Bank and Mivne Real Estate, you can compare the effects of market volatilities on Israel Discount and Mivne Real and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Israel Discount with a short position of Mivne Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Israel Discount and Mivne Real.
Diversification Opportunities for Israel Discount and Mivne Real
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Israel and Mivne is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Israel Discount Bank and Mivne Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mivne Real Estate and Israel Discount is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Israel Discount Bank are associated (or correlated) with Mivne Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mivne Real Estate has no effect on the direction of Israel Discount i.e., Israel Discount and Mivne Real go up and down completely randomly.
Pair Corralation between Israel Discount and Mivne Real
Assuming the 90 days trading horizon Israel Discount Bank is expected to generate 0.93 times more return on investment than Mivne Real. However, Israel Discount Bank is 1.07 times less risky than Mivne Real. It trades about 0.04 of its potential returns per unit of risk. Mivne Real Estate is currently generating about 0.01 per unit of risk. If you would invest 186,080 in Israel Discount Bank on August 25, 2024 and sell it today you would earn a total of 53,320 from holding Israel Discount Bank or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.74% |
| Values | Daily Returns |
Israel Discount Bank vs. Mivne Real Estate
Performance |
| Timeline |
| Israel Discount Bank |
| Mivne Real Estate |
Israel Discount and Mivne Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Israel Discount and Mivne Real
The main advantage of trading using opposite Israel Discount and Mivne Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Israel Discount position performs unexpectedly, Mivne Real can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mivne Real will offset losses from the drop in Mivne Real's long position.| Israel Discount vs. Bank Hapoalim | Israel Discount vs. Mizrahi Tefahot | Israel Discount vs. Bezeq Israeli Telecommunication | Israel Discount vs. Elbit Systems |
| Mivne Real vs. Azrieli Group | Mivne Real vs. Alony Hetz Properties | Mivne Real vs. Israel Discount Bank | Mivne Real vs. Melisron |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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